The honest range
For most small businesses with one to ten employees running bi-weekly payroll, full-service payroll processing costs between $50 and $200 per month. That range reflects differences in employee count, pay frequency, state filing complexity, and whether the service includes year-end W-2 preparation and quarterly reporting.
The number that matters more than the monthly fee is what payroll errors cost. IRS penalties for late deposits run up to 15 percent of the unpaid tax per quarter. State penalties add on top of that. A single late deposit on a $10,000 payroll tax obligation costs $1,500 in federal penalties before Rhode Island adds its share. That is not a hypothetical — it is a common outcome for small businesses managing payroll on their own.
What full-service payroll includes
A full-service payroll provider handles more than just cutting checks or initiating direct deposits. Full service means calculating gross pay for every employee — including overtime, commissions, and variable compensation — withholding federal income tax, state income tax, Social Security, and Medicare from each paycheck, making tax deposits to the IRS and the Rhode Island Division of Taxation on the correct schedule, filing quarterly payroll tax returns (Form 941 federal, RI-941 state), filing unemployment insurance returns, and preparing and distributing W-2s at year end.
When a payroll service handles all of this, the penalty risk effectively transfers. If a deposit is late because of a processing error on the provider's side, that is their problem to resolve. When you manage payroll yourself, every error is your liability.
What drives the cost up
Several factors push payroll costs above the base range. Multiple pay frequencies — some employees weekly, some bi-weekly, some semi-monthly — add complexity. Multi-state employees require filings in each state where an employee works. Garnishments, levies, and child support orders require additional processing. Tip reporting for restaurant workers has specific requirements. Workers' compensation integration, benefits deductions, and 401k contribution processing all add layers.
For most small businesses in Providence with a straightforward workforce, the base range is accurate. The more complex your payroll situation, the more the service is worth.
The comparison that matters
The question is not whether payroll service costs money. It is whether the cost of the service is less than the cost of the alternative. Time spent managing payroll yourself — learning the rules, staying current as they change, making deposits, filing returns, preparing W-2s — has a real cost even if it does not show up as a line item. Errors have a real cost that shows up as penalties. A payroll service that costs $100 a month and eliminates four hours of owner time and penalty risk is not an expense. It is a return.
Premium Services Corporation's approach
Payroll is handled as part of the broader financial relationship. You do not manage a separate vendor for payroll and another for accounting and another for tax. Everything runs through one relationship, which means payroll data flows directly into your bookkeeping and your tax preparation without translation errors or reconciliation gaps.